Nhra>class act

#16 08-12-2008, 01:44 PM

Quote:

Originally Posted by James Hill

I'm sure this has been asked and answered before but, what is to keep you from refilling "Official Legal" drums with product you might find elsewhere at a lower cost? Is there a chemical marker that the Fuel Check folks look for?

VP colors their nitro yellow ... all other nitro is clear ... at least that is what I was told to keep "the Don" from running his stuff at NHRA events ... so if the fuel check folks open the tank and take out a clear sample, you are in big trouble ...

#17 08-12-2008, 02:01 PM

I was under the impression that the "Organization" keeps records on how much fuel was used by each team. So many runs = so many gallons. And they better be close to their calculations.

Late...........Mitch

#18 08-12-2008, 02:19 PM

Quote:

Originally Posted by James Hill

I'm sure this has been asked and answered before but, what is to keep you from refilling "Official Legal" drums with product you might find elsewhere at a lower cost? Is there a chemical marker that the Fuel Check folks look for?

Invoices must match what is purchased vs. what is used, based on sales info from VP... Even if you bought a drum of non-VP, somewhere along the lines you'd have to accomodate for those 3-4 runs (warmups? we don need no steekin warmups!!

)... That, along with the dye markers make it a requirement to stay on the up-and-up with this. That's what makes this so frustrating- Glendora has painted themselves into a corner with this one, and now have no elbow room to punch themselves out of the problem because of the contract with VP... Even doing this on the up-and-up gets somebodys panties in a wad over at VP, as they now look like the ONLY place that can't seem to get inexpensive pop..

#19 08-12-2008, 02:39 PM

Quote:

Originally Posted by James Hill

I'm sure this has been asked and answered before but, what is to keep you from refilling "Official Legal" drums with product you might find elsewhere at a lower cost? Is there a chemical marker that the Fuel Check folks look for?

A couple of seasons ago some teams were deemed as not using enough based on the runs they made. Big brother is watching

#20 08-12-2008, 03:18 PM

Stole this from a post at classicfunnycarboard.... It mentions nitromater so i figured it was relevant to post it here on this subject

This was sent out today to all NHRA nitro teams:

Dear NHRA Nitromethane Customer:
(I don’t want you to look at this as impersonal—after reviewing the content below, please feel free to call me on my cell phone or I’ll talk to you at Indy.)

You’re likely aware of the many “news” stories posted on various internet websites about the price of nitromethane, along with continuing commentary by interested parties. These stories generally cast VP in a negative light and perpetuate the perception that VP is part of some "conspiracy" with NHRA to gouge racers on nitro prices. These rumors are not accurate or fair.

First, this “conspiracy” theory is not even close to reality. VP pays NHRA no commission, no royalty or anything else from nitro sales. Our sponsorship agreement with NHRA from its inception in 2000 through 2009 under the current extension includes no compensation to NHRA in any form for nitromethane sales.

Second, you may have seen a rumor posted on an internet website recently about the “likelihood of another nitro price increase to $2000 per drum by the U.S. Nationals at Indy.” This rumor is completely unfounded. In fact, it’s quite surprising that it was posted given that the editor for the site in question was informed just as you were that our price of $1822 was effective at least through the U.S. Nationals at Indy. As a matter of fact, what seems likely is that prices will be reduced after Dallas, given that prices are starting to ease in China.

Third, I’d like to pass along some information to put the current price of nitromethane in perspective. To that end, I’ve attached below two excerpts—one from a thread posted on nitromater.com and the other from an article posted on competitionplus.com. Both reference the cost of nitro at IHRA races this season. Comparisons have frequently been made between prices charged for nitro at IHRA events and VP’s prices at NHRA events, primarily to make the case that VP's prices are too high.

The first excerpt includes a quote from Jim Walczak, who's personally involved in servicing IHRA races with nitro, wherein he says, "The price of that VP Nitro... probably not that far off from what it should be....(IHRA nitro) should have been sold at something closer to $1,550 - $1,650 per drum (if we were trying to cover overhead and such)."

In the second excerpt, Terry McMillen is interviewed about his procurement of nitro for IHRA races. McMillen said, “I just got a new price yesterday (August 5) and just my cost alone was $1700 (for a 500 lb drum). And we have to have it delivered on top of that. The $2000 price frame is definitely in sight now. In IHRA there’s not a profit margin…we’re just basically moving it for what we have in it.” He continued, “(from the 53-gl drum), you got to pump it off into 40’s…by the time you add all the extra costs…we’re going to have another $60 in it. Plus, you add the freight…it will be $1800.”

These remarks are telling, given that both reference prices very similar to VP’s price at NHRA events. Mr. Walczak’s “$1650 per drum” reference is within about $170 of VP's current price at NHRA, where VP incurs significantly more overhead than those involved in servicing IHRA events, given the wider geographic scope of the NHRA race schedule, contingency payments to racers, incremental costs to comply with DHS, transportation of partial drums after races, etc. Mr. McMillen’s figures are also right in the same ballpark with VP’s.

In all the continuing discussions of nitro pricing on the internet and elsewhere, these perspectives are perhaps the most meaningful, given that both gentlemen are the only ones actually involved in providing anything remotely resembling the service VP provides to NHRA and therefore have the experience and data to render an intelligent opinion. Every other comment, opinion or judgment reported on the internet and other media about the nitro pricing issue to date has come from someone who has never walked in VP’s shoes, never jumped through the hoops we’ve jumped through to secure a supply, never provided the level of service VP provides, never provided the responsible custodianship of material so critical to the sport and without which would spell the death of drag racing.

To put things more into perspective, compared to the cost of nitro when drums were priced at $850 at an NHRA event, the current cost of buying nitro in China is 3.5X higher, while for some container loads we’ve paid more than 4X the cost we incurred for an $850 drum. Along with the cost of the material, the cost of ocean freight has doubled during the same time frame. And just like you, VP’s cost to drive to each race has increased dramatically with the price of diesel. Despite all this, the cost of nitro to you at $1822/drum is about 2.6X the earlier price of $850, adjusted for 42-gl drums. Bear in mind, what VP delivers to you is a top quality product. It’s not simply a commodity taken directly off the boat from China and poured into your tank. We analyze, test and certify our nitromethane to confirm its quality, along with ensuring your health and safety and that of NHRA fans. As you’re a business owner who handles nitromethane, I’m sure the health and safety of your employees is of paramount importance to you.

In other postings on the internet, it’s been suggested VP was not proactive in preparing for the nitro shortage. The fact is VP was as proactive as possible given the information available to us at the time. First, until earlier this year we were at the mercy of importers, i.e., middlemen. We ordered nitromethane in October 2007 from our supplier, fully expecting delivery in time for the beginning of the 2008 season. When our supplier failed to fill multiple orders, we became almost entirely dependent on VP’s existing inventory of nitro that, fortunately, was sufficient to see NHRA through the first part of this season. That inventory originally was destined for not only NHRA but our hobby fuel and industrial customers. In the end, it essentially saved the beginning of the 2008 season for NHRA. While dealing with these supplier issues through the off-season we, along with the rest of the nitromethane industry, were simply unaware of the impending worldwide shortage of nitromethane. The fact that the shortage did subsequently occur simply accelerated an already difficult situation.

Note that VP itself didn’t escape injury from this shortage. By earmarking 100% of the nitro inventory for NHRA, VP had to forego all the business and profit we normally would see from the hobby fuel and industrial markets, both of which are more profitable to us than drag racing. It’s uncertain at this point if we’ll ever get all that business back. But the point is NHRA Drag Racing and drag racing in general is our core business.

What has VP done since then? We’ve negotiated long term supply agreements direct with producers in China and also plan to open our own office in China. This will greatly facilitate our supply line and give us more influence on quality, shipping and other issues. We’ve secured storage bunkers for stockpiling a year’s supply of nitromethane, so drag racing will never again be held hostage by producers, government embargos or natural disasters.

We will continue to supply products that are safe for use by and around racers and spectators. And we’ll continue to work with the governmental agencies that control our destinies. As you know, nitromethane is on the DHS list of dangerous chemicals and is currently under scrutiny. This is a critical issue that must be taken very seriously. We are working on the continuing usage of nitromethane in NHRA now and long into the future.

I want to assure you we will always be good stewards of drag racing and do our best by you as a customer. I would ask you to respect the difficult position NHRA is in. They’re trying to balance the interests of all parties involved in the nitro issue while ensuring the long-term viability of the sport. And I would ask you to respect VP and give us the benefit of the doubt. When you see rumors or alleged “news” on the internet or hear it elsewhere, consider the source. Please don’t hesitate to contact us to check your facts.

I value you as a customer and hope to remain in your service far into the future. I understand your passion for the sport. I have it too.

Best regards,

Steve Burns

#21 08-12-2008, 03:32 PM

Well its good to see they are dicussing and passing along info although I have 2 questions

If they don't get anything out of it (either cash for nhra or a cheaper deal for he racers) why have an "official" anything. Unless I misread it he makes it sound like no money goes from vp to nhra for the right to be the sole provider.

It doesn't mention the rumor that a cheaper deal was offered. Was it or was it not?

#22 08-12-2008, 04:25 PM

Quote:

Originally Posted by PJ Sapienza

Well its good to see they are dicussing and passing along info although I have 2 questions

If they don't get anything out of it (either cash for nhra or a cheaper deal for he racers) why have an "official" anything. Unless I misread it he makes it sound like no money goes from vp to nhra for the right to be the sole provider.

It doesn't mention the rumor that a cheaper deal was offered. Was it or was it not?

Hey PJ - not speaking for VP here, but rather offering some ideas.

I would imagine that anyone trying to sell fuel at an event would hope to turn a profit for the effort. I guess the 'rub' is how much is acceptable profit? To me, it would be like blaming the local convenience store because the price of gas is to high.

Again, my guess here... an 'official' supplier relationship would help ensure some sort of profitability and consistency structure to the fuel situation. Could someone open the doors and allow a second supplier? Sure. But you would also have to consider the repercussions. Would the second supplier provide all of the same services? What happens if neither supplier can then make a profit? Who then supplies the next race or races?

If anyone really sat down and did the math on what it cost to provide nitro (and other racing fuels) to IHRA and NHRA, you'd probably scratch your head, ask how they did it and then thanked them for bringing that precious commodity to the race.

My guess is that if NHRA and IHRA opened up the 'bidding process' to be a fuel supplier for national events the line of interested parties would not be that long. No need to take a number, just bring a big fat check book.

What's that old saying about drag racing? What to make a million dollars drag racing? Bring several....

#23 08-12-2008, 04:25 PM

The bigger issue here is the fact that everyone is relying on one supplier that is Chinese. Not knocking the Chinese, but there needs to be more than one manufacturer hopefully in more than one country.

To place the future of Nitro racing in any one's company's hands is a recipe for disaster. What if Good-Year backed out of Top Fuel tires? That would be a bigger problem in the short term than nitro but we keep heading down the road of "Official Suppliers" with no exit in sight.

If as he says there is no kickback to be an "Official Supplier", I say as long as a supplier's products meet the spec for the product then let the free market theory apply.

#24 08-12-2008, 04:45 PM

Quote:

Originally Posted by Jim Walczak

Hey PJ - not speaking for VP here, but rather offering some ideas.

I would imagine that anyone trying to sell fuel at an event would hope to turn a profit for the effort. I guess the 'rub' is how much is acceptable profit? To me, it would be like blaming the local convenience store because the price of gas is to high.

Again, my guess here... an 'official' supplier relationship would help ensure some sort of profitability and consistency structure to the fuel situation. Could someone open the doors and allow a second supplier? Sure. But you would also have to consider the repercussions. Would the second supplier provide all of the same services? What happens if neither supplier can then make a profit? Who then supplies the next race or races?

If anyone really sat down and did the math on what it cost to provide nitro (and other racing fuels) to IHRA and NHRA, you'd probably scratch your head, ask how they did it and then thanked them for bringing that precious commodity to the race.

My guess is that if NHRA and IHRA opened up the 'bidding process' to be a fuel supplier for national events the line of interested parties would not be that long. No need to take a number, just bring a big fat check book.

What's that old saying about drag racing? What to make a million dollars drag racing? Bring several....

fair enough, I would think though if you're selling the right for someone to be the exclusive anything that a) you would get something for it b) ideally you would set some type of limit on how much can be made per item

#25 08-12-2008, 05:22 PM

"First, this “conspiracy” theory is not even close to reality. VP pays NHRA no commission, no royalty or anything else from nitro sales. Our sponsorship agreement with NHRA from its inception in 2000 through 2009 under the current extension includes no compensation to NHRA in any form for nitromethane sales."

PJ, the way I read it, VP would make their profit on the other fuels they supply. I could be wrong (probably).

Mark.

#26 08-12-2008, 06:57 PM

This is coming from the same company who begged Don for his supply of nitro,then bashed him. It turned into a pi$$ing contest after that and who's to believe them on what they say? Something isn't right here,NHRA and VP doesn't make any $$$$$ from the sale of nitro but yet no other supplier can come in. NHRA's contract gives VP sole control over the nitro sales,VP can't supply enough,contract should be void due to the fact they can't supply enough. I for one will be glad when the whole,truthful story comes out and we see once and for all see what's behind this farce. If I was a nitro racer and knew there was cheaper,more plentiful nitro out there and NHRA is still flexing their muscles and not allow it,I'd be hot. NHRA & VP knows this is probably a short term problem and all will be fine next year,so they're willing to take the heat for now. They also know that the average fan,not the all knowing internet fans like us don't have a clue,so why worry?

#27 08-12-2008, 09:30 PM

Quote:

Originally Posted by Jesse Robinson

I'm not surprise, if Graham Light took the offer then all the racers would know what he paid then he wouldn't be able to make enough profit to fill his pockets with money. I sure hope SMI buy these guys out, i want to hurl everytime i hear his name.

Jesse, if you're going to publicly accuse Graham Light of something, let's hear your FACTS to back up your accusation. If you don't have any FACTS, and I'm sure you don't, you probably should just keep quiet.

#28 08-12-2008, 09:38 PM

Quote:

Originally Posted by Jet Townsend

The bigger issue here is the fact that everyone is relying on one supplier that is Chinese. Not knocking the Chinese, but there needs to be more than one manufacturer hopefully in more than one country.

To place the future of Nitro racing in any one's company's hands is a recipe for disaster. What if Good-Year backed out of Top Fuel tires? That would be a bigger problem in the short term than nitro but we keep heading down the road of "Official Suppliers" with no exit in sight.

If as he says there is no kickback to be an "Official Supplier", I say as long as a supplier's products meet the spec for the product then let the free market theory apply.

A couple of thoughts:

There is more than one supplier for Nitro - they are all from China - US companies that make nitro will not sell as racing fuel (another subject)
I don't understand your Goodyear theroy. We can't race without tires, we can't race without nitro. Or then again we could, but I think they call that TAD and A/FC

#29 08-12-2008, 09:52 PM

After reading this thread it got me wondering if the high nitro prices are only effecting america or if they effect other places to , so I looked up the price of nitro here in new zealand . For a 44 gallon drum here in new zealand from VP fuels it costs $3,319.03 in NZ dollars which converts to $2,293.35 USD. I should say though that that price is not directly from VP fuels its from a company that distributes it .